Monday, July 28, 2008

Software Piracy May Be eBay's Next Legal Hurdle

The Software Information Industry Association (SIIA) has been keeping a close eye on eBay and the voluminous amount of counterfeit software that is being listed on the popular auction site. The shear volume of counterfeit software has raised red flags for the SIAA, so much so that they are now contemplating a law suit that would be representing hundreds of software vendors.

The SIAA has made several attempts at helping eBay reduce sales of illegal software. Despite a few years of discussions, eBay refuses to do more than just take down auctions of software that the SIIA has identified as pirated.

"Once notified, they will do something," Keith Kuperschmid, senior VP of intellectual property policy and enforcement for SIIA, told InformationWeek. "What they won't do is what we consider pre-emptory, proactive measures."

Those measures include placing a notification in the buyer feedback section that the seller has had pirated items removed from the site; penalize sellers of illegal software, even if it's their first offense; and develop technology to try to find repeat offenders who use multiple identities on eBay.

The reason the SIIA wants eBay to do more is because so much pirated software is sold on the site that the group can't identify all the offenders, Kuperschmid said. The SIIA estimates that 75% of the software sold on eBay is illegal.

EBay's refusal to take these steps has led to SIIA discussions of taking eBay to court. The latest talks among members were in May. SIIA members include many big names in software, such as IBM and Oracle.

Over the last several months eBay has faced many challenges in courts over counterfeit goods. Should the SIAA proceed with a lawsuit it would likely be one of the first and largest such suits focus on copyright infringement instead of trademark infringement, as in previous cases.

The Digital Millennium Copyright Act (DMCA) of 1998 and other copyright law sets out strong standards for secondary copyright infringement, said Kupferschmid. U.S. copyright law allows lawsuits for vicarious infringement, when the defendant has the ability to stop infringing activity and has a direct financial interest in the infringement.

This year, the SIIA has filed 32 lawsuits against eBay sellers accused of marketing counterfeit software. This week, an Oregon man was sentenced to four years in prison for identity theft and for selling counterfeit software on eBay, after the SIIA complained about him.

1 comment:

  1. Anonymous9:13 AM

    When businesses purchase software from auction sites like eBay they put themselves at risk for copyright infringement. Business audited by the SIIA and BSA are rarely given credit eBay purchases even those that are legitimate. I advise my clients not to purchase software on eBay. In my opinion, the SIIA's threatened case against eBay will be tough to win. Autodesk was recently creamed in a federal case involving an eBay seller (see Vernor v. Autodesk). If you are looking for a legitimate low cost source for discount software visit I have been sending my clients to this company for years without any problems.

    Rob Scott
    Scott & Scott, LLP


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